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First Comes Student Debt, Then the Deferment Deals

NEW YORK ( TheStreet) -- With the unemployment rate for millennials at 11.5%, young Americans from ages 18-29 are having a tough time paying off college loans.

A study from TransUnion shows that 43.5% of all student loan debt is in "deferred" status -- meaning more borrowers have to suspend their loan payments because they can't afford to make them.

A big reason is the rapidly increasing size of student loan debt. TransUnion says that student loan balances rose by an alarming 75% between 2007 to 2012, to $23,829.

"With the economy either in recession or slowly coming out of it during the study period, we had expected that student loan balances might increase as consumers frustrated with the job market went back to school to work toward a different career path," said Ezra Becker, vice president of research and consulting in TransUnion's financial services business unit. "However, the rate of growth we observed was truly eye-opening."

TransUnion says young Americans are forced into student loan deferment because they can't find a good job. The study says that the unemployment rate for Americans ages 25 and under is 53.6%, while the amount of student loan deferments has risen to $388 billion from $228 billion in the past five years.

Even with deferment, the clock is ticking on student loan borrowers.

"It is especially noteworthy that more than half the student loans in our study were in deferment, and with unemployment rates remaining high, particularly among recent graduates, the repayment of these loans remains a concern," Becker said. "Students can defer their loans for only a certain period, often up to three years. After that, these students can find themselves in a difficult position financially."

If you find yourself in that situation -- a college graduate with loans you can't pay -- deferment may be a necessary evil. By and large, a deferment allows you to extend your loan and buy some time if you are out of work or underemployed and can't make your loan payments.

How do you get a deferment?

First, contact your student loan provider and ask for a deferment application. Explain your circumstances clearly and concisely, and chances are your deferment will be granted. The key is to keep your lender in the loop, so to speak. If they know you want to pay the loan but can't right now, most lenders (especially those tied to publicly funded student loans) will grant a deferment.

Another option is to reduce the amount of monthly loan payments you can make. Let's say you have a $150 monthly student loan payment and you have a part-time job. Loan providers may be amenable to a deal where you pay $75 per month until you get back on your feet.

In general, lenders will grant deferments in the event of a job loss or if you move on to graduate school and don't earn much income.

It's not the best situation -- after all, deferment is only one step away from outright default.

But if you can't make your student loan payments, don't beat yourself up. You're hardly alone, as the TransUnion figures attest. And deferment can buy you some much-needed time to catch up on your college debt and allow you to get on with your life.

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